Trade & Channel Strategies 2024: A GTN Bubble Balancing Act
A panel examines the gross-to-net bubble across various product mixes, how pricing impacts market access, and more.
The third and final day of Trade & Channel Strategies in Philadelphia continued its slate of thought-provoking content with a morning session on “Balancing the GTN Bubble with Market Access Priorities.”1 Moderated by Jake McDowell, VP of market access, Partner Therapeutics, he was joined by Mike Rowland, senior director of pricing contracts and analytics, Acadia Pharmaceuticals, and Tom Evegan, principal, strategy & management consulting, RSM US.
The goal of the panel was to analyze the gross-to-net (GTN) bubble across multiple product mixes, including but not limited to brand, biosimilars, and generics; support the needs of the stakeholders by deliberating distribution networks and market access while determining ways for company profitability; and explore pricing's role when it comes to access.
In the December issue of Pharma Commerce, Bill Roth succinctly refers to the GTN bubble as “the widening gap between the gross revenue (the total sales at list price) and the net revenue (the amount received by the manufacturer after discounts, rebates, fees, and other adjustments). This gap has been expanding significantly in recent years due to changes in regulations surrounding pricing in the industry; expansion of government programs; expansion of the use of programs such as 340B; and increased demands for rebates from pharmacy benefit managers (PBMs) and insurers.”2
Keeping this in mind, the panel began with a dive into the some of the new factors that are impacting the gross-to-net specifically within the marketplace, growing that bubble.
“I think the easy one to always focus on from a larger chunk of growth-to-net is always managed care. I think any organization—large or small—is more than likely to have those conversations,” explained Rowland. “Regarding the distribution piece of it too, there's a sharper focus on that as well. I think of PHS specifically, along with contract pharmacy policy, as being really big and interesting one, as well as the rebate models that have recently been proposed. I think as PHS continues to grow as part of most manufacturers’ books, the ability to try to temper that a little bit is where you're seeing a lot of focus. I know most of the larger manufacturers are the ones that are going after that now, but with some of the recent legislative wins on the manufacturer side—as well as the one that's coming up with HHS—I think you might start to see a lot of the smaller and mid ones start to follow.
Evegan was in agreement, and noted the impact the 340B will continue to have in the immediate future.
“340B is going to be something that everyone in this room and back at your companies are going to be dealing with for quite some time,” he explained. “I think that the legislative aspects right now are still being debated in court. You probably have seen some cases that are out there: J&J filed, then withdrew, and then came back with their rebate model. A couple of other manufacturers have followed suit. I think the rebate model in 340B is going to change. There was interesting news that was brought up yesterday about the removal of pharmacies from that vertical integration model—it’s going to be interesting to see where that winds up, because I think that's going to impact quite a bit of 340B business moving forward.
“The key crux of the issue is that the government has not defined what a patient is for that program, so that's actually being held up legislatively, and that's important because any patient can actually show up to an outpatient facility, receive the drug, and then the institution receives the discount; for rebate, the manufacturers pay back versus the actual patient receiving any benefit. We’re seeing spillover in Medicare as well. … I did do some polling with some of our clients. We've actually seen 12 Medicare Part B states now coming online that are invoicing drug manufacturers in Medicaid. It's just something to think about as we talk about all these channels: what are the different nuances that we're seeing? One thing that gets a little bit overlooked—and relates or is tangential to the gross-to-net waterfall—is that there's also state transparency compliance. When you launch a new drug, we have to ensure there's compliance.”
Other points that were covered during the session included: the distribution models that are popping up as a result of these aforementioned factors; the product archetype and how that changes perspective as one looks at distribution and managing that accordingly; how the Inflation Reduction Act impacts GTN; and the impact that pricing is now having on gross-to-net, along with restrictions.
References
1. Evegan T, McDowell J, Rowland M. Balancing the GTN Bubble with Market Access Priorities. December 12, 2024. Trade & Channel Strategies, Philadelphia. https://informaconnect.com/trade-channel/
2. Roth B. Going Inside the Gross-to-Net Bubble and Its Nuances. Pharmaceutical Commerce. December 5, 2024. https://www.pharmaceuticalcommerce.com/view/going-inside-the-gross-to-net-bubble-and-its-nuances
